BP - Bearish Problem, or Bullish Possibility?

Somehow when I first started this blog, I knew for sure there will be a time I'll be REALLY tempted to type something about BP's Big Problem (B.P.). I can't help thinking and following the news about BP all week or so.

So in case you have no clue what the whole issue is.... here's a summary.

• So BP's Deep Horizon oil rig caught fire and sank into the ocean deep spewing it's contents at the gulf of Mexico.
• The oil spill began on 25 of April and they tried a ton of ways to stop the millions of gallon of oil but to no avail. (they even tried putting golf balls and mud over it.. really..)
• An estimate of 500,000 to 800,000 gallons of oil is released to the ocean DAILY.
• The people affected at Louisiana aren't too happy as they live their lives with the beautiful beaches and marine life (all of which are mostly dead, scattered)
• BP chalked up to-date $1.25 billion of bills and charges
• BP stocks fell from $62.38 (high point in the 52-week) to a all-time low of $37.25
• BP still offered to pay dividends to their investors in July which made President Obama not too happy.

Okay, this is really a VERY brief summary. I can't type out a months worth of news. Please click the link here to refer to the long list of news. BP Stock news by Fool.com

If it's months news, why only type now?

BP's stock price has been going DOWNHILL since the disaster. Stockholders have been pulling out their stocks desperately and quickly. Thing is, BP share price finally picked up $0.45 (1.21%). People are beginning to dump their money in the firm once again.

After all that has happened, how can BP survive?
This thought has quickly passed my mind after doing some research. I narrowed it down to factors that may affect BP's survival. These three factors are namely Money, Society, Product.

Let's first look at BP's monetary issue, does BP has the financial capability to not go bust?

As of today, BP has chalked a total of $1.25 billion in bills. Sounds scary enough. But if you actually take a quick glance, BP has a total of $7 billion in cash reseres as of 31 March. Talk about a big sum of money. Well then again, BP is not just losing money from the costs of the oil spill, BP is also losing "potential money" from the oil leaking from the oil spill. Above that, will BP still pay, as promised, their yearly dividends of close to 10% to their shareholders this July?

Secondly, let's look at another of BP's problem. There are facebook sites to boycott BP and the people of Louisiana aren't really too happy with BP causing the oil spill and taking so long to clean it up. America is boycotting BP. Louisiana has held countless rallies and campaigns against BP. This social issue will definitely bring down BP's revenue. Looking at it at a whole different light, BP has stations all over the world and this thought came unto me, does the world really care about Louisiana's problem? Would one in China really not pump BP or buy it's all-time-low stocks just because BP has made lives terrible in Louisiana?

The last factor that probably affects BP's potential future is the product that they are offering. BP offers oil. The world runs on oil. Simple, and to the point.

Would I buy BP stocks?
Do I see BP as a bullish possibility? Definitely. I highly doubt BP may go bankrupt. Of course, nothing can be promised. BP stocks are taking a dive, but would I be catching falling knives? Perhaps the stock isn't "ripe" yet, I'll wait a little longer to see it's progress. I wouldn't pump all of my $10k into BP stocks though, that would be a maneuver of too high risk. If anything fails my whole pot will do downhill together with this blog.

There's really a lot more to BP's story and potential, you should really check them out. I'm trying to keep this post as short and summarized.

Look at the poor oil-covered Pelican... will that stop you from supporting BP's stocks? (call me cruel but not me really..)

Photo courtesy of http://news.yahoo.com